RNase T is one of eight distinct 3'-->5' exoribonucleases present in Escherichia coli. The enzyme plays an important role in stable RNA metabolism, including tRNA end turnover and 3' maturation of most stable RNAs because it is the only RNase that can efficiently remove residues near a double-stranded (ds) stem. In the course of study of its specificity and mechanism, we found that RNase T also has single-strand-specific DNase activity. Purified RNase T degrades both single-stranded (ss)RNA and ssDNA in a non-processive manner. However, in contrast to its action on RNA, RNase T binds ssDNA much more tightly and shows less sequence specificity. As with RNA, DNA secondary structure strongly affects its degradation by RNase T. Thus, RNase T action on a dsDNA with a single-stranded 3'-extension efficiently generates blunt-ended DNA. This property of RNase T suggested that it might be a useful enzyme for blunt-ended DNA cloning. We show here that RNase T provides much higher cloning efficiency than the currently used mung bean nuclease.